August may pass just like that...But September can't...
"The most important part of trading is the psychological level of an individual...Are you OK with the fact of losing money is part of the job"
-Pierce Curran; Amplify Trading.
Many investors aren't very fond of September due to its historical of bearish trend, and has been categorize as one of the worst month of the year. I opened this blog with quote from Pierce Curran of Amplify Trading because it is the most rational things for an individual to start trading.
After baffling weeks full of volatility in the market, especially in the futures, particularly oil market. After the reporting shortage of oil supply in the US on 14 of September, at the same time, the IEA and OPEC increased the forecast for oil supply in 2017 as fields are found and the US shale oil drillers proven to be more resilient (read more here), which then impacted a decreasing price of oil on the 14th. The same happen in Indonesia as well, after four days decline, the Jakarta Stock Exchange gained 2.38% after a series of news on the positive result of tax amnesty.
The third week of September has always been the worst, and it will happen again this year. The Indonesian has been very volatile during the second week of September where the Index was down for four days in a row, and jump to 2.38% on Thursday, and slightly increase on Friday by 0.02. Traders around the world is looking forward to the September FOMC meeting that will be held on Tuesday Morning. Initially, many analysts speculated that the Federal Reserve will raise the interest rate, but after a disappointing result on U.S. retail sales data (-0.3% vs Forecast of -0.1%), the markets are currently pricing at 12% chance of a rate hike according to investing.com's Fed Rate Monitor Tool, and the odds for December is around 55%, hence this resulting a higher volatility in the market, not only in the U.S., but also in Indonesia as well. The pressure of higher sell-off from foreign investor can be seen on Friday, where most of the economic data in Indonesia are positive, but the market only increased by 0.04% compare to Thursday's result.
On other news, Waskita Precast Beton will have its IPO on Wednesday using WSBP for their ticker in the trading floor. With this in mind, the prediction on the market will be mix due to the "wait and see" behavior from the foreign traders, but the euphoric moment for domestic traders. I may say that it will be euphoric moment because back in 2014, Wijaya Karya also released their subsidiary company - Wijaya Karya Beton (Ticker; WTON) and it already give return of 18% since its inception. Just for consideration, WTON performance was on its peak in early 2015, with its high of Rp. 1,440 , which give a return of 87% in one and a half years since its inception - and that's what I meant by euphoric moment in IPO of government owned companies.
WSBP's parent company (Waskita Karya; ticker: WSKT) had its IPO in late 2012 on December. The initial price of the share was 439, whereas now (as of Sept. 16 2016) is at 2,650 a share, that's a whopping 503% in 4 years. To compare with WTON, in its first two years, WSKT gave an outstanding performance of 194%. To put into consideration, precast concrete business and infrastructure contractor may not apple to apple, but considering it's a subsidiary of a successful IPO of a government owned company, WSBP maybe a good buy to hold for the next - at least two years time.
To conclude this long and boring blog of mine, be caution of the volatility in the market - at least until the FOMC meeting and the final decision from the RDGBI in regards to the interest rate in Indonesia. WSBP may perhaps be a good buy, but it will be wise to hold the buy until the market has calm from all the uncertainty and confusion.
To read more in depth about Waskita Precast Beton corporate action, you may click here.
-TRADE RESPONSIBLY-
"The most important part of trading is the psychological level of an individual...Are you OK with the fact of losing money is part of the job"
-Pierce Curran; Amplify Trading.
Many investors aren't very fond of September due to its historical of bearish trend, and has been categorize as one of the worst month of the year. I opened this blog with quote from Pierce Curran of Amplify Trading because it is the most rational things for an individual to start trading.
After baffling weeks full of volatility in the market, especially in the futures, particularly oil market. After the reporting shortage of oil supply in the US on 14 of September, at the same time, the IEA and OPEC increased the forecast for oil supply in 2017 as fields are found and the US shale oil drillers proven to be more resilient (read more here), which then impacted a decreasing price of oil on the 14th. The same happen in Indonesia as well, after four days decline, the Jakarta Stock Exchange gained 2.38% after a series of news on the positive result of tax amnesty.
The third week of September has always been the worst, and it will happen again this year. The Indonesian has been very volatile during the second week of September where the Index was down for four days in a row, and jump to 2.38% on Thursday, and slightly increase on Friday by 0.02. Traders around the world is looking forward to the September FOMC meeting that will be held on Tuesday Morning. Initially, many analysts speculated that the Federal Reserve will raise the interest rate, but after a disappointing result on U.S. retail sales data (-0.3% vs Forecast of -0.1%), the markets are currently pricing at 12% chance of a rate hike according to investing.com's Fed Rate Monitor Tool, and the odds for December is around 55%, hence this resulting a higher volatility in the market, not only in the U.S., but also in Indonesia as well. The pressure of higher sell-off from foreign investor can be seen on Friday, where most of the economic data in Indonesia are positive, but the market only increased by 0.04% compare to Thursday's result.
On other news, Waskita Precast Beton will have its IPO on Wednesday using WSBP for their ticker in the trading floor. With this in mind, the prediction on the market will be mix due to the "wait and see" behavior from the foreign traders, but the euphoric moment for domestic traders. I may say that it will be euphoric moment because back in 2014, Wijaya Karya also released their subsidiary company - Wijaya Karya Beton (Ticker; WTON) and it already give return of 18% since its inception. Just for consideration, WTON performance was on its peak in early 2015, with its high of Rp. 1,440 , which give a return of 87% in one and a half years since its inception - and that's what I meant by euphoric moment in IPO of government owned companies.
WSBP's parent company (Waskita Karya; ticker: WSKT) had its IPO in late 2012 on December. The initial price of the share was 439, whereas now (as of Sept. 16 2016) is at 2,650 a share, that's a whopping 503% in 4 years. To compare with WTON, in its first two years, WSKT gave an outstanding performance of 194%. To put into consideration, precast concrete business and infrastructure contractor may not apple to apple, but considering it's a subsidiary of a successful IPO of a government owned company, WSBP maybe a good buy to hold for the next - at least two years time.
To conclude this long and boring blog of mine, be caution of the volatility in the market - at least until the FOMC meeting and the final decision from the RDGBI in regards to the interest rate in Indonesia. WSBP may perhaps be a good buy, but it will be wise to hold the buy until the market has calm from all the uncertainty and confusion.
To read more in depth about Waskita Precast Beton corporate action, you may click here.
-TRADE RESPONSIBLY-
Comments
Post a Comment